Germany’s Commerzbank has decided to allocate a total of €610m ($745m) in the fourth quarter of 2020 to cover for planned job cuts.
This move comes after the bank signed an agreement with the Group Works Council (GWC).
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This cost will cover redundancies of as many as 2,300 full-time positions at the bank from 2021 to 2024.
In the third quarter of 2020, the Frankfurt-based lender already set aside restructuring costs of about €200m ($245m). This cost covered a part-time retirement programme.
The Q3 and Q4 restructuring provisions abet the headcount reduction of nearly 2,900 full-time positions.
Both these restructuring measures are a part of Commerzbank 5.0 strategy that was announced last year.
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By GlobalDataIn September 2019, the bank called for a total of 4,300 redundancies by 2023.
Commerzbank said it would also add 2,000 new positions in different areas, according to Bloomberg.
The additional provisions in Q4 2020 has been passed by the bank’s board of managing directors and is subject to the receipt of auditor’s approval.
In a statement, the bank said: “The restructuring provisions will have a correspondingly negative impact on the net result in the fourth quarter of 2020.”
Commerzbank CFO Bettina Orlopp said: “As announced, we are posting additional restructuring expenses in the fourth quarter.
“As a consequence, we are creating the basis for absolutely necessary future cost savings.”
Under the new strategy, the German lender is also planning to announce further restructuring measures in the first quarter of 2021.
Previously, Bloomberg said that the bank’s supervisory board chairman Hans-Joerg Vetter and incoming CEO Manfred Knof are looking to replace the 2019 cost-cutting plan with the one that could put 10,000 jobs at risk.
